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Research from the Rock: Next-Gen Transportation Management Systems

  • The trucking industry is composed almost entirely of small carriers. The extremely fragmented freight logistics industry is responsible for moving 53.6M tons of freight in the US every day, making coordination and optimization the name of the game.
  • The Transportation Management System (TMS) market is projected to reach $45 billion by 2030, enabling freight companies to better coordinate their logistics networks.
  • TMSs primarily service three main segments: carriers, intermediaries, and shippers, each of these relying on their specialized TMS to manage its specific role and ensuring the smooth and timely flow of goods from origin to destination.
  • Legacy systems have their drawbacks. They are time-consuming and costly to implement, making them more suitable for larger customers that spend $100 million annually on freight, representing 1% of the total market.
  • Many companies lack the in-house expertise needed for system configuration, data migration, and software integration, leading to the need for external consultants.
  • New-generation startups are emerging to fill the gaps – they're cheaper, easier to use, and smarter. Startups like Rose Rocket, Alvys, Rectangle, Chain.io, Cargoflip, Transflo, and Tive are developing cloud-based solutions that aim to be lighter, more accessible versions of traditional TMS software.
  • Winners in TMS space will use a “land and expand” approach: starting with point solutions and growing functionality from there.
  • Two significant applications for next-gen TMSs are entry automation and real-time route replanning. These applications offer seamless integrations that unify data from different systems and create a single source of truth, allowing for streamlined workflows and centralized operations.
  • Finally, emerging tech and shifting demands across the supply chain have created an opportunity for innovative startups in the $45 billion TMS market. Increased accessibility to better tracking, visibility, and faster delivery times drive disruptive ideas to simplify the supply chain.

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